History (1993): Iomega Could Sell SyQuest Compatible Cartridges

Can you imagine Coca-Cola selling Pepsi?

This is what is almost happening: in the WW market of removable magnetic disk cartridges, only 2 US companies have been fighting for the past few years: Iomega Corp. (Roy, UT) with its flexible Bernoulli disks and SyQuest Technology Inc. (Fremont, CA) with its HDDs. They both have been sharing a WW market worth $300 million in 1992.

And now Iomega has signed with the French company Nomai SA (Avranches, France) a binding letter of intent for the exclusive WW distribution (except France), of SyQuest-compatible cartridges that the small French start-up began manufacturing in Avranches.

The agreement is subject to the reliability tests of the French cartridges.

It already appears that Iomega, that had been praising the superiority of its Bernoulli cartridges compared to SyQuest cartridges, will no longer have the same opinion. But after all, maybe Iomega is just trying to weaken its competitor by letting Nomai use its distribution channel to cut down on the sales of SyQuest’s cartridges which account for its entire benefits (when SyQuest looses money on drive sales).

This announcement is coming along with a huge lawsuit between SyQuest and Nomai. On April 14, the Superior Court located in Santa Clara County ruled in favor of Nomai and denied SyQuest’s request for preliminary injunction to stop Nomai from manufacturing and selling cartridges. But SyQuest will pursue this lawsuit to trial.

Nomai can now sell its cartridges in the US and anticipates that it will take at least a year before this lawsuit comes to trial.

Nomai said that SyQuest has also filed legal actions in Europe and with the International Trade Commission (Washington, DC) vs. Nomai and Iomega in an attempt to stop the defendants from entering the cartridge market.

According to an US source, SyQuest has won an injunction in the District Court of Frankfurt barring import and distribution of Nomai’s cartridges in Germany.

The Californian firm is seeking order at the High Court of Justice in London, UK.

As a reaction to SyQuest’s attacks who had these tests done – with disastrous conclusions for Nomai – by Quanta Laboratories (Santa Clara, CA) and Surface Science Laboratories (Mountain View, CA), the French company has just offered free cartridges to some computer magazines so they can test them in their laboratories. Nomai said they have shipped over 40,000 cartridges with an under 1 per 1,000 return rate.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 64, published on May 1993.